Terms of Use

Terms of Use

2006 | Mark A. Lemley
Electronic contracting has evolved significantly over the past decade, with courts increasingly enforcing terms of use, such as shrinkwrap, clickwrap, and browsewrap licenses, even when no explicit agreement is made. These terms, which govern the use of software or websites, have become central to modern business practices. While courts have generally enforced these terms, especially against businesses, they have been more cautious when applying them to individual consumers. This distinction has led to concerns about the fairness and enforceability of these terms, particularly in cases where users are not aware of or have not agreed to the terms. The rise of terms of use has sparked significant debate, with critics arguing that they undermine the traditional principles of contract law, particularly the requirement of assent. Courts have been influenced by property law concepts, applying real estate rules to online agreements, which has led to a shift away from the need for explicit agreement. This has created a situation where users may be bound by terms they have not read or agreed to, raising questions about the enforceability of these terms. The legal landscape is further complicated by the overlap between contract law and property law, with courts often conflating the two. This has resulted in a situation where the terms of use are enforced without proper consideration of the user's intent or awareness. The problem is exacerbated by the fact that many terms of use are designed to govern a wide range of interactions, leading to potential conflicts and contradictions between different terms. The article argues that the current approach to terms of use is flawed and that a more balanced approach is needed. It suggests that courts should limit the enforcement of terms of use to situations where there is a clear indication of assent, particularly in business-to-business contexts. The article also highlights the need for a parallel solution to the "battle of the forms" that has been resolved by the Uniform Commercial Code (U.C.C.), which provides a framework for resolving conflicts between standard form contracts. In conclusion, the article calls for a reevaluation of the legal principles governing terms of use, emphasizing the importance of ensuring that users are aware of and have agreed to the terms before they are bound by them. This would help to maintain the integrity of contract law and ensure that the principles of assent and mutual agreement are upheld in the digital age.Electronic contracting has evolved significantly over the past decade, with courts increasingly enforcing terms of use, such as shrinkwrap, clickwrap, and browsewrap licenses, even when no explicit agreement is made. These terms, which govern the use of software or websites, have become central to modern business practices. While courts have generally enforced these terms, especially against businesses, they have been more cautious when applying them to individual consumers. This distinction has led to concerns about the fairness and enforceability of these terms, particularly in cases where users are not aware of or have not agreed to the terms. The rise of terms of use has sparked significant debate, with critics arguing that they undermine the traditional principles of contract law, particularly the requirement of assent. Courts have been influenced by property law concepts, applying real estate rules to online agreements, which has led to a shift away from the need for explicit agreement. This has created a situation where users may be bound by terms they have not read or agreed to, raising questions about the enforceability of these terms. The legal landscape is further complicated by the overlap between contract law and property law, with courts often conflating the two. This has resulted in a situation where the terms of use are enforced without proper consideration of the user's intent or awareness. The problem is exacerbated by the fact that many terms of use are designed to govern a wide range of interactions, leading to potential conflicts and contradictions between different terms. The article argues that the current approach to terms of use is flawed and that a more balanced approach is needed. It suggests that courts should limit the enforcement of terms of use to situations where there is a clear indication of assent, particularly in business-to-business contexts. The article also highlights the need for a parallel solution to the "battle of the forms" that has been resolved by the Uniform Commercial Code (U.C.C.), which provides a framework for resolving conflicts between standard form contracts. In conclusion, the article calls for a reevaluation of the legal principles governing terms of use, emphasizing the importance of ensuring that users are aware of and have agreed to the terms before they are bound by them. This would help to maintain the integrity of contract law and ensure that the principles of assent and mutual agreement are upheld in the digital age.
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